 | ||
| ||
 | 7 steps in buying a home | |
You can save a lot of time and hassle by getting a good real estate agent. You don't pay any more, and in fact you usually save money because a good real estate agent knows the fair market price and can negotiate effectively with the seller.
A mistake many people make is going through ads. However, ads represent only a small fraction of the homes on the market, so that you usually get a much better house through an agent. Many people come to a real estate agent only after they've wasted a lot of time. An agent can usually find a better home for the money, and quicker. You can compare, and have nothing to lose.
1. Get a good sales representative with a good realtor
Look for:
- Trustworthiness -- has integrity
- Experience - knows Ottawa, and how to handle many situations
- A leading realtor most familiar with the largest and best selection of homes
Well-established real estate companies try to recruit and manage the best agents in a region.
An agent for one realtor can sell a home listed by another realtor, but must accept a lower commission as it's split more ways. Good, successful agents don't worry about how much their commission is, but struggling agents sometimes do, especially those still struggling to support their chosen lifestyle and living paycheck to paycheck.
The selection of a good agent with a good realtor will culminate in your signing a Buyer Agency Agreement, which makes the agent and realtor your "Buyer's Agent" so that they are guaranteed to get a commission from the seller (not you, the buyer) for helping you find your home, and that you will get diligent and fair services by the laws of the Province. Before signing it, you should feel free to take a copy of this agreement with you for as long as you wish in order to understand it.
2. Determine what specifications you want
For example, what general style of home, how many rooms of different purposes, how large the rooms, what features, which neighborhood or region, and price. Your agent knows the right questions to ask to help you clarify your needs and wants, and can help you come up with a range of specifications.
This process will culminate with two lists, one of the minimum specifications of what you need and want, and the other of the kinds of extras you would like to have. Perhaps no one house has or could have all the extras you want, but a house with the nicest combination would be good.
You should bring your spouse and perhaps others to discuss your wants and needs with your real estate agent. This is done in a fairly relaxed and informal environment.
This is an initial, exploratory session so that you develop a good idea of what you may want and what's available in general, and so your agent can find a set of homes for you to consider.
However, to get a realistic short list of homes, you must first do your numbers.
3. Analyze your finances and arrange a mortgage
Most of us are not Einsteins at math, so don't be shy about your finances. Also, be very careful and realistic. Based on your financial situation, your real estate agent can give you a general idea of what may be available to you, but it's much better if you formally determine a mortgage before you start searching for a home, for these reasons:
- You know where you stand on credit, and what homes are available to you
- A seller will take you much more seriously
- You can close more quickly
- You can lock in an interest rate in advance, and clarify your personal finances
- You can negotiate from a position of strength
- Better sooner than later to get a mortgage approval, for the sake of efficiency
You may already have a long-standing relationship with a bank or other lender and decide to pursue a mortgage with them. If not, Dale can assist you in finding a lender, or you can go to a mortgage broker. Usually, mortgage brokers are paid by the lending institution. However, if your credit history is weak, they may charge you a fee or else work on a commission basis of around 1% to 2% of mortgage.
You must get a credit report, a letter from your employer or other documentation on the level and stability of your income, and a list of debts and other expenses. If there will be more than one owner (e.g., your spouse), then they may need to supply this information, too. All information is confidential.
A little advice here: You will be offered a certain maximum dollar amount for a mortgage. That does not necessarily mean that you can afford a house up to that amount and still have other elements in your lifestyle. You should analyze your finances independently and decide what you can afford for a house, based on your lifestyle, other future expenses, and general values in life. You will be the one making the monthly payments and any trade-offs in the future. You should decide for yourself.
This process will culminate in a Pre-Approval Certificate. You should have a guaranteed interest rate for a certain period, e.g., if you close within the next 90 days -- in writing.
Once you have determined how much you would like to spend on a home, your agent will be able to determine which homes are really available to you.
4. Start searching for and viewing homes
Out of all the houses on the market, you should be able to get the one optimal home for you. This is where you need a professional real estate agent the most. Your agent should be:
- up to date on the homes that enter the market every day
- familiar with many homes that your agent has already visited
- intimately familiar with the neighborhoods and regions of Ottawa and the elements of each
- able to discuss many unwritten considerations of homes listed
Your agent should be able to go through the vast listings quickly and pull out just a dozen or so of the houses best for you. At this time, you're ready for your agent to arrange viewings. The process of going out and looking at homes usually takes just one or two days, thanks to your agent's familiarity with the field.
When you view a home, you should know everything to look for. Dale Kantymir worked in construction for 11 years prior to his 10 years as a real estate agent, and knows things to look for which many real estate agents and home buyers wouldn't see.
You should also discuss with Dale what you like and don't like in each of the houses you see, as discussed in our section on things to consider when buying a home, including things like home layout, appliances, decor, etc. Based on this, Dale can note what can be modified for a potential contract (e.g., appliances), cost considerations, what cannot be changed, and might streamline your itinerary on remaining homes to view.
5. Make an offer
Some agencies see making an offer and making a conditional agreement (step 6 below) as the same. However, we see step 5 as an analysis and decision, followed by a negotiation process. Indeed, it does not proceed to step 6 unless and until there is agreement on a price and a bilateral committment to proceed.
This is where your agent can make a big difference in getting a fair price in a reasonable amount of time. A good agent can cite examples of the prices of similar homes recently sold in the same neighborhood and region, and has years of experience negotiating a fair price. Dale Kantymir has been negotiating fair market prices with a great variety of people over his 10 years as a real estate agent.
The price of an offer may be conditional upon certain repairs or enhancements. While Dale Kantymir's previous 11 years in construction gives him an edge in seeing many needed repairs, for legal and other reasons you should get a formal building inspection done by a specialist in inspections as noted elsewhere on this website. There shouldn't be any surprises after purchase.
You should decide upon one house and focus on that offer. If it is clearly the one house you want, then you should expedite a negotiation before someone else does, but you should not feel rushed into making a final decision on a price. Some sellers and buyers are slow to realize and accept the market price, and occasionally there are some who apply pressure by "sales tactics". Your experienced real estate agent should be able to handle the negotiations for you, and you should feel completely comfortable with the final price before making a final decision.
If you're not sure and comfortable, then you should let go of the home by breaking off negotiations, and look for another home.
6. Make a "Conditional Agreement"
After you reach a mutually agreed upon price with the seller, you will bring in a lawyer.
Your real estate agent and lawyer will prepare the black-and-white legal paperwork properly, including all elements unique to this home and your negotiation -- there's a reason this is called a "conditional" agreement.
Once the conditional agreement is signed by both seller and buyer, the property is formally taken off the market.
A conditional agreement includes the following:
- Price, property definition, names, etc.
- Elements of the property which are included, such as stoves and decorative lamps
- Inspections the property must pass
- Terms and conditions such as successfully obtaining financing or selling your existing property
- Closing and occupancy date
- Irrefundable deposit which the buyer puts down to show good faith
7. Close the sale - execute with lawyers
Execute the signed documents prepared in step 6 "Making an offer", in a timely manner. You should be finished and ready well before the closing date. Once both sides have completed their ends of the agreement, you can start preparing to move.
Need more real estate buying advice?
Jump straight to other Buyer Help guides, tools and features
- 7 steps in buying a home
- Online house and property listings
- House and property auto-search
- Things to consider when buying a home
- Checklist of costs when buying a home
- Mortgage payment calculator
- Personal financial considerations
- Home inspections
If you have any questions about buying homes or property, you can send Dale Kantymir a message.
